A "preferred stock purchase agreement" is a contract where an investor purchases preferred stock in a company, pursuant to specified terms and conditions. For example, venture capitalists often invest in start-up companies pursuant to a preferred stock purchase agreement. The key provisions of preferred stock purchase agreements include:

• Amount of shares being sold
• Price paid
• Rights of the preferred holder
• Representations and warranties of the company
• Covenants of the company
• Disclosure schedule
• Registration rights
• Voting rights, including veto rights on major transactions such as the sale of the company or new financings
• Anti-dilution protection
• Pre-emptive rights
• Rights to Board seats
• Redemption rights
• Dividend rights

Sample preferred stock purchase agreement can be found at www.LegalAgreements.com.